Churn refers to the deactivation of an active customer account. Organizations which provide or deliver information in an environment of significant competition are particularly prone to churn. Such organizations include cellular telecommunication providers, paging service providers, cable television providers, on-line database providers, long-distance telecommunication service providers, and the like. Monthly churn rates in the range of 2% to 5% of an existing customer base are common for cellular service providers. Churn in the cellular industry is both intersystem (caused by customers switching between competing carriers) and industry churn (customers leaving the cellular-marketplace altogether). Increased operational costs result from churn simply due to the expenses incurred in attracting and signing up new customers to maintain or grow the customer base. Replacing churned customers with new ones can still result in lost revenue because average revenue per subscriber tends to decrease with time.
The reasons for churn are many and varied, but an underlying factor is often customer dissatisfaction. The organizations which suffer most from churn tend to offer services based on newer and more complex technologies. Customers are required to master operational equipment complexities and to make decisions regarding complex billing plans and situations. Mismatches between customer needs on one hand and provided features and billing plans on the other are a common source of customer dissatisfaction. Likewise, customer misunderstanding about how equipment and billing plans operate is another common source of customer dissatisfaction. Compared to customers of other organizations, customers of communications and/or information providing organizations may be more willing to take actions, such as changing service providers, when they are not completely satisfied with their service. Accordingly, communications and/or information providing organizations have a need to identify customers having a high potential for situations of dissatisfaction, to identify such customers as quickly as possible, and to propose actions and offers which address such situations.
Conventional systems used in customer service organizations by communications and/or information service providers fail to meet these needs. For example, such systems primarily present billing, trouble tickets, and other customer account information but provide no real analysis of this data. These systems are used reactively in the process of responding to customer calls. Often, organizations direct many more resources toward responding to customer-initiated complaints than to proactively identifying customer-dissatisfying situations before the customer is irritated enough to complain.
Regardless of how a dissatisfied customer is identified, conventional systems do not provide sufficient information to the customer service representatives to enable immediate response in reactive scenarios, or to save teams, which tend to be proactive in nature, to completely identify problems in a timely manner. Consequently, customers may be forced to suffer lengthy wait periods while organization representatives search through diverse systems for information items which may help identify and resolve dissatisfying situations.
Furthermore, organizations have limited human resources to apply to the save team and customer service functions. Typically, an organization's save team is limited to fewer more highly skilled or experienced individuals when compared to the larger customer service organizations. Such individuals are typically empowered to offer monetary incentives on behalf of the organization. Due to their higher skill and expertise level, the organization has confidence that such proposals will not result in a net loss to the organization. By comparison, an organization's customer service representative team is typically composed of many lower skilled or less experienced individuals. Such individuals typically have more limited authority in proposing actions and offers to customers. As a result, the majority of organization representatives that deal with customers are not empowered to do much about keeping customers satisfied.
Proactive customer retention efforts by a save team are recognized to have high value, but the limited save team resources can typically only address a limited portion (i.e. 2%-5%) of a customer base of 100,000-500,000 for a medium to large market. Thus, prioritization of customers for proactive contact is desirable. Unfortunately, conventional systems do not facilitate this prioritization process.
In addition, conventional systems fail to sufficiently account for a customer's worth to an organization. For example, an organization may desire to expend more resources on a mildly dissatisfied but highly valued customer than on a highly dissatisfied customer which has little value to the organization. Likewise, an organization may wish to propose more lucrative offers to highly valued customers than to customers which have little value to the organization. Conventional systems which fail to account for customer worth and/or customer vulnerability to churn cause an organization to misappropriately allocate human resources and to misappropriately respond to potentially dissatisfying situations.